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CONDOM PROCUREMENT GUIDE

Population and Reproductive Health Thematic Group
Knowledge and Practice Guide Series
*





Prepared by


Tom Merrick and Joanne Epp





Health, Nutrition, and Population
The World Bank




November, 2001



* Please address correspondence to: Joanne Epp, Reproductive Health Thematic Group Health,
Nutrition, and Population Department, MSN G7-701, The World Bank, 1818 H Street, NW,
Washington DC, 20433. Telephone: (202) 473-1083, Fax: (202) 522-3489, Email:
jepp@worldbank.org.
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ACKNOWLEDGMENTS

This guide is the result of an extensive consultation with Bank operations and procurement staff,
UN partner agencies, and private sector experts. Many people contributed to the development of
the guide. They include: Anabela Abreu, Joanne Angers, Que Bui, Rene Bonnel, Kevin Casey,
Mam Chand, Ramesh Govindaraj, Amara Gumnerdngam, Phil Gowers, Kees Kostermans, V. S.
Krishnakumar, Michele Lioy, Patricia MacGowan, Blanchard Marke, John May, Alison Micheli,
Mary Mulusa, Richard Skolnik, Jean-Jacques Raoul, Wendy Roseberry, Miriam Schneidman,
Raj Shukla, Susan Stout, Yolanda Tayler, Bert Voetberg, Diana Weil (World Bank), Christian
Saunders, Leslyn Gittens, Anne Fabiani, Jagdish Upadhyay (UNFPA), Karla Bonner, Chuck
Szymanski (PSI), Dennis Blairman (DFID Consultant), Franz Pletch (GTZ), David Jamieson
(Crown Agents), Freddie Monkhouse (FEDPRO Federation of Procurement Specialist
Organizations).

A special thanks to Sanjana Quazi (World Bank Summer Intern), who undertook a survey of the
Banks experience with condom procurement.

The guide was initially developed as a web-based resource to be updated and expanded with
continuing contributions of practitioners. The full version of the guide is available on the Banks
website including the complete set of resources in the Annexes. To find the guide from the
Banks external home page, www.worldbank.org/ type in hnp after the address,
www.worldbank.org/hnp which takes you to the HNP homepage, then go to Publications>HNP
Informal Discussion Papers. The list is by authors name. For further information please contact:
Joanne Epp, Population and Reproductive Health Thematic Group, Health, Nutrition, and
Population Department, MSN G7-701, World Bank, 1818 H Street, NW, Washington, DC
20433. Telephone: (202) 473-1083, Fax: (202) 522-3489, Email: jepp@worldbank.org.



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TABLE OF CONTENTS


Acknowledgments

1. Introduction 1

2. Procurement Approaches 2

3. Assessing Requirements 5

4. Standards, Specifications, and Quality Assurance 7

5. Bidding Documents 8

6. Procurement Capacity Issues 9

7. Linking to Other Components 10

Annex 1: Bank Procurement Documents 11

Annex 2: Procurement Documentation from Bank Projects 12

Annex 3: UNFPA Standard Agreement for Governments Utilizing UNFPA
Procurement Facilities 13

Annex 4: WHO/UNAIDS Guide on Technical Specifications
for Condoms 22

Annex 5: Additional Resources 24

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1. Introduction

This guide is geared to the operational needs of World Bank staff and Borrower-country
counterparts who seek to procure condoms for the prevention of HIV/AIDS and other sexually
transmitted infections. It draws upon and complements more detailed documentation produced
by the World Health Organization (WHO/UNAIDS),UNFPA and others, as well as World Bank
procurement documents. Its main purposes are to highlight key issues and options to consider
when designing condom procurements and to help users navigate the more detailed
documentation that is available on these issues when additional information is needed.

The guide responds to a variety of operational needs:

The HIV/AIDS pandemic is undermining economic development and poverty reduction
efforts in affected countries and reversing many of the public health gains that those
countries have made.
With an HIV/AIDS vaccine still several years away, condom promotion, in combination
with effective communication and community mobilization, is the most effective
prevention measure.
The World Bank is rapidly expanding its support of HIV/AIDS programs in affected
Borrower countries, and condom promotion will be an important component of these
programs.

On a global level, there has been very rapid expansion of publicly financed condom procurement
over the last decade in response to the HIV/AIDS epidemic. This expansion has been supported
and managed mainly by grant donors. Some national governments are also procuring condoms
with support from Bank/IDA projects. Because of prior dependence on donated commodities and
lack of experience, the capacity to procure condoms is limited or nonexistent in many Borrower
countries. In addition:

Procurement issues for condoms differ significantly from those that affect other health
care products.
The condom manufacturing industry was established many years before medical device
regulations were introduced and has only recently come under scrutiny.
Current standards are geared mainly to markets and conditions in industrialized countries.
Poor quality condoms put users at risk of infection and can undermine the credibility of
prevention programs.
Latex condoms are a biodegradable product and can deteriorate rapidly under tropical
conditions without appropriate formulation and packaging; while condoms made of
synthetic materials are being developed, they are not widely available.
As a high- volume, low unit cost commodity, condom procurement is at greater risk for
corruption when it is prevalent.

The remainder of this document provides information about: (1) The range of procurement
approaches that may be employed; (2) Assessing condom requirements and scheduling
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deliveries; (3) Standards, specifications and testing requirements; (4) Bank bidding documents;
(5) Capacity issues and capacity-building; and (6) Linking condom procurement to other
HIV/AIDS components, for example social marketing and behavior change communications.

Annexes include examples of bid documentation from Bank projects and selected other materials
that may be useful to staff.


2. Procurement Approaches

This section discusses four procurement approaches available to staff and Borrowers: (1)
procuring directly from manufacturers; (2) contracting an agent to procure from manufacturers;
(3) procuring through UNFPA; and (4) contracting a social marketing organization for
promotion, distribution as well as procurement. Each has advantages and drawbacks, depending
on country needs and conditions. The following table summarizes some of the main issues,
which include country experience and capacity, the size and complexity of the procurement, and
the strength of the countrys distribution network. It is followed by a more detailed discussion of
each option.

Option Borrowers
experience and
capacity
Size and complexity of
procurement
Strength of
distribution
network
Direct from
manufacturer
Country should have a
proven track record; if
not, risk of failure is
high
Better for larger
procurements & when
other commodities being
procured in addition to
condoms
Country should have
well developed
logistics
management and
distribution system
Through a
procurement
agent
Better if country does
not have experience;
important to ensure
that agent is qualified
Also an option for larger,
more complex
procurements
If logistics weak,
tender should
require technical
support
Through
UNFPA
Better for countries
that lack experience
and capacity
Better for smaller
amounts and when
limited to condoms and
contraceptives
If logistics weak,
ensure that UNFPA
also addresses this
issue
Through a
social
marketing
organization
An alternative if
country willing to
contract out
A good bet if country
wants to combine
procurement with
promotion/distribution
If logistics and
distribution weak,
SM may be the best
option


a) Procuring directly from manufacturers: Countries procuring from manufacturers need to
adhere to the Bank/IDA procurement procedures outlined in their Loan/Credit Agreement and
use the Standard Bidding Documents (SBDs) for suppliers of health-care goods and the
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Technical Note (TN) for The Procurement of Health Sector Goods. These documents are
available on the Banks website: http://www.worldbank.org/html/opr/procure/healthdocs.html.
Overall Bank procurement procedures are explained in the Banks guidelines Procurement
under IBRD Loans and IDA Credits - the red cover guide, most recently revised in 1999, and
available on the external website: http://www.worldbank.org/html/opr/procure/guidelin.html.

Several procurement methods are possible for procurement from manufacturers (international
competitive bidding-ICB, limited international bidding- LIB, etc.). Depending on the size of the
contract, the TN recommends ICB for multisource products such as condoms. Condoms for the
Brazil HIV/AIDS project were procured in this way (see Annex 2). The main limitation that has
affected procurements using this approach has been limited experience and national capacity for
dealing directly with manufacturers, particularly in countries that have in the past relied on
donated commodities procured directly by the donors who supplied them. (See Annex 2 for link
to ICRs for Kenya 3rd and 4th population projects).

Relatively few companies account for most of the estimated 7-9 billion condoms produced each
year. These include SSL International (UK formerly London Rubber), Ansell (USA), Dongkuk
(Korea), Seohung (Korea), Fuji (Japan) and Hindustani Latex (India). There are also large
manufacturers in Malaysia, Thailand and Brazil. Condom production is a technically demanding
process, which affects both the quality and prices of products on the market.

The need to ensure high quality for disease prevention moved WHO to set up international
standards (see Section 4) and urge pre-qualification of manufacturers. UNFPA and international
grant donors regularly pre-qualify manufacturers and require that all their condom suppliers
conform to WHO/UNAIDS standards. The Banks SBDs now call for pre-qualification. Condom
repackaging operations can be located in a broader range of places because they require less
stringent technical specifications and smaller quantities to be economically viable. A number of
developing countries import condoms in bulk foil-strip packs and repackage them in boxes of 3-
12 pieces with local brand names.

b) Contracting an agent to procure from manufacturers. An alternative to procuring from
manufacturers is to engage a procurement agent to procure on behalf of the Borrower. This
approach is recommended when the procurement capacity of the implementing agency is limited.
In this approach, the Borrower will first seek bids from agents using procedures for the hiring of
consulting services. These procedures are explained in the Banks guidelines for Selection and
Employment of Consultants by World Bank Borrowers, the green cover guidelines, revised in
1999, and available on the website: http://www.worldbank.org/html/opr/consult/contents.html.
Using a procurement agent offers several advantages over procuring directly from
manufacturers. Procurement agents can help countries develop capacity for doing their own
procurement in the future if capacity building is included in the arrangements.

Agents who deal regularly with manufacturers should have experience in dealing with pre-
qualification, testing, packaging and shipping requirements. Agents may be able to get better unit
prices than the countries could get on their own. The down-side of working with an agent is that
fees may offset any price advantage. Such arrangements may undermine a countrys efforts to
develop its own procurement capacity if this issue is not addressed in setting them up. Working
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with an agency may reduce the risks of corruption where that has been a problem in dealing
directly with manufacturers, but vigilance is still required (especially in cases where unfamiliar
agents suddenly appear in response to a tender).

c) Procurement from a United Nations (UN) agencyin this case UNFPAas a supplier or
through them as a procurement agent. The UN agencies involved in health have agreed that
UNFPA will buy condoms on their behalf, using WHO/UNAIDS specifications. UNFPA
undertakes both pre-qualification of manufacturers and lot-by- lot compliance testing for every
order that is placed. Procurement from UNFPA has been used by some Borrower countries for
small quantities of condoms. Procedures for procur ing from UN Agencies must follow
paragraph 3.9 of the Guidelines: procurement under IBRD Loans and IDA Credits. Accordingly,
specialized agencies of the United Nations (UN), acting as Suppliers, pursuant to their own
procedures, may be the most economical and efficient way of procuring small quantities of off-
the-shelf goods, primarily in the fields of education, health, and rural water supply and
sanitation. Annex 3 provides UNFPAs Standard Agreement for governments utilizing
UNFPAs procurement facilities.

Small is defined by the TN for emergencies resulting from famine, floods, wars, the influx of
refugees and epidemics, poor planning, or foreign exchange scarcity situations as under $5
million (para. 3.11.7.1). The amount also depends on what UNFPA can divert from its supply
pipeline at a given point in time. UNFPA does not stockpile condoms but can draw on
manufacturers stocks that are maintained for emergency situations. The amounts available will
depend on existing commitments. While this approach has been used in some cases, the Banks
procurement officers discourage it. Bank staff have also commented that delays in meeting
delivery commitments are fairly common with this approach.

The recommended approach is to procure through UNFPA as a procurement agent, which is
subject to the same selection procedures as those used for the selection of other procurement
agencies the Borrower might hire. These are found in the green cover guidelines described in
the previous section. This document notes that UN agencies may be hired as the consultants
where they are qualified to provide technical assistance and advice in their area of expertise. In
these cases, Borrowers are required to conduct a competitive selection process in which UNFPA
would not receive any preferential treatment.

Under certain circumstances, the Borrower may be permitted to engage UNFPA as a sole source
procurement agency. The criteria for sole source selection are spelled out in paragraphs 3.8 and
3.9 of the green cover guidelines: the task represents a natural continuation of a pre-existing
arrangement, rapid selection is essential, very small quantities are involved, UNFPA is the only
organization qualified or possessing exceptional worth for the assignment, etc. As noted, the
justification for single-source selection shall be examined in the context of the overall interests of
the client and the project, and the Banks responsibility to ensure economy and efficiency and
provide opportunity to consultants from all member countries to the extent possible. If single-
source selection is being considered, it is important that justification and plans be spelled out in
project documents and included in the loan or credit agreement. The Banks regional
procurement advisory offices provide assistance for this.

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Besides UNFPAs procurement agent services, there are private firms specializing in condom
procurement. For example, Crown Agents has considerable experience with condom
procurements on behalf of DFID and the EU in several countries in Africa.

d) Contracting with a social marketing organization for condom promotion and including
condom procurement in that agreement. Another option is a service agreement in which an
organization is contracted to provide a package of services, for example condom promotion and
social marketing, and is allowed to supply condoms from its own procurement pipeline. The
arrangement involves issues similar to those described above for UNFPA (supplier versus
agency role) but is further complicated by the fact that the organization is working as an
implementing agency (subject to regulations governing procurement of services). Most agencies
that are contracted as implementing agencies have distributed condoms that have been procured
for them by donor agencies; however some agencies, including Population Services International
(PSI), a U.S.-based nonprofit organization active worldwide in social marketing efforts, also
procure condoms directly from manufacturers.

This kind of arrangement was employed in Haiti, where PSI has marketed a low-cost condom
since 1989. After over a year of negotiations, the Haitian government, using funding from the
World Banks Basic Health Services loan, agreed to contract with PSI on a sole-source basis on
the grounds that PSI is one of the few, if not only organization with the procurement and
distribution capabilities the government was seeking. An initial contract of $686,000 covered the
costs of procuring and packaging condoms. A subsequent contract, currently in effect, includes
$306,000 for condom purchases and another $94,000 for distribution and marketing. Funding
from other sources continues to provide the bulk of the social marketing programs promotional
and administrative costs (see Annex 2 for documents).


3. Assessing Requirements

For technical reasons as well as the rapid increase in demand, advance planning is required to
ensure quality and timely delivery of condoms. Large volume orders may help countries achieve
lower prices, but biodegradability, limited shelf-life and expiry dates require attention to good
supply management practices. The Banks SBDs for condoms request that suppliers warrant that
at least five/sixth of the shelf- life of products remain upon delivery. Storage conditions,
including exposure to heat, oxidation, humidity, ozone and ultraviolet light contribute to more
rapid deterioration of condoms. However, data show that condoms in intact foil or foil-plastic
laminate packages last at least five years on the shelf, and WHO suggests that a minimum of
three years shelf- life be stipulated. Plastic packages are less expensive but expose condoms to
greater and more rapid deterioration and reduce shelf life. Consideration needs to be given to
factors that affect the time between manufacture and delivery of the product. Because of a high
weight to value ratio, air- freight is very expensive for condoms. Testing requirements add time to
the delivery schedule, and the capacity of a supplier or agent to meet such requirements will be a
factor in the time it takes from placement of orders and production of the product to date of
delivery. For the product in harsh settings, and limited storage capacity in many countries
requires that deliveries be staged rather than all at once.
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Methodologies for forecasting condom requirements and scheduling deliveries have been
developed by agencies working in the field of contraceptive logistics management, including
John Snow Inc. (JSI), the Program for Appropriate Technology in Health (PATH), the U.S.
Centers for Disease Control and Prevention (CDC), as well as UNFPA and WHO. These
methodologies take account of such factors as historical trends in demand, lag time between
placement of orders and actual delivery to the country, shelf- life of the product under local
conditions, and warehousing and distribution capacity in the country. Other helpful information
includes inventories and projected pipelines of product being supplied through other changes,
trend data on usage and estimates of increased use that might result from promotional efforts.
Rule-of-thumb estimates are typically around 150 condoms per projected user per year; however
this may vary depending upon wastage, loss through pilferage, and program needs for such user
groups as sex workers. Detailed guidance on these topics can be found in CDCs Family
Planning Logistics Guidelines, JSIs Contraceptive Forecasting Handbook and UNFPAs The
Role of the Logistics Manager in Contraceptive Procurement: A Checklist of Essential Actions.
http://www.unfpa.org/tpd/globalinitiative/index.htm. Since forecasting and planning are on-
going tasks, attention should be given to developing capacity for them in countries. The
WHO/UNAIDS guidelines provide a brief overview of planning and logistics management
issues. (See Annex 4, Fact Sheet 5.)



JSIs Contraceptive Forecasting Handbook provides detailed guidance for assessing condom
requirements and planning deliveries. The Handbook describes four approaches based on
different data sources: (1) logistical system data on shipments, stocks and flows through the
distribution system; (2) service statistics on condoms provided in clinic-based programs; (3)
population data on specific target groups and how they are likely to change; and (4) distribution
system capacity, an important consideration for condoms because of their vulnerability to heat
and humidity. It also provides an illustrative example of how the techniques would be applied,
noting that most countries use a combination of data sources. The Handbook also notes that
population-based methods need to be adapted to address the special needs of HIV/AIDS
prevention programs. It illustrates how to define separate consumption factors for different
population segments. A similar approach using country-specific estimates of potential target
groups is suggested by the Banks ACTafrica unit in its guidelines for costing HIV/AIDS
interventions. These materials are available on the Banks website (see Annex 5).



The above- mentioned agencies also provide technical support to countries on supply-chain
management issues. For example, UNFPA has recruited logistics experts for its Country Support
Teams, and JSI continues to provide support to countries under the USAID- funded Deliver
project, a successor to the highly successful Family Planning Logistics Management project.


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4. Standards, Specifications, and Quality Assurance

The WHO/UNAIDS condom procurement guidelines (see Annex 4) remind us that the
distinction between a specification and a standard confuses many people, and notes that the
confusion is understandable because specifications and standards deal largely with the same
attributes. According to WHO/UNAIDS condom guidelines, a standard establishes a minimum
level of quality that can ensure safety and efficacy of the project, while a specification is a
statement of the buyers requirements and will cover all attributes of the product. A standard is
concerned with essential performance attributes and not special requirements of individual
buyers. Standards also provide consensus on the procedures and protocols to use when carrying
out basic tests for quality verification.

Worldwide there are three major agencies that have established condom manufacturing
standards : the International Organization for Standardization (ISO), the Comit Europen de
Normalisation (CEN), and the American Society for Testing and Materials (ASTM).
WHO/UNAIDS guidelines on condom procurement are based when appropriate upon ISO 4074
Standard for Latex Rubber Condoms.

Specifications, on the other hand, reflect buyers requirements and will cover all attributes and
features of the product essential, general and performance requirements as well as discretionary
design requirements. In some cases, the specifications may demand a higher level of quality
than a national standard requires. The current ISO standard has no package- integrity
requirement. The WHO/UNAIDS specifications set package-integrity requirements because of
the special conditions and harsh conditions of storage and distribution that condoms are likely to
be subject to in developing country settings.

The WHO/UNAIDS guidelines for condom procurement provide detailed information on how to
prepare specifications for bidding documents. Specifications list the purchasers various
requirements and describe the means by which those requirements will be verified. These
include: general requirements on the safety of materials and characteristics such as shelf- life;
performance requirements such as resistance to breakage; design requirements for such attributes
of the product as odor or width/length/thickness and lubrication, which may affect its
acceptability to specific users; and packaging requirements to address special program needs, for
example social marketing. The WHO/UNAIDS Guidelines spell out specification requirements
in detail (see Annex 4).

Testing procedures to verify conformity with specifications also need to be addressed. While
pre-qualification of suppliers increases the likelihood of consistent high quality of condoms
delivered, even the most careful manufacturer can suffer quality lapses. For this reason, it is
important to verify that every lot complies with requirements before being accepted for shipment
to the purchaser.

When a consignment is ready for shipment, the supplier will inform the purchaser that the
consignment is ready for testing. The purchaser then instructs a sampling agency to visit the
suppliers factory to draw samples in accordance with ISO guidelines. The sampling agency
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sends the samples direct to the testing laboratory, where they are subjected to quality testing.
WHO/UNAIDS provides a list of testing laboratories and other services, though it does not
endorse the organizations that it lists.

The WHO/UNAIDS guidelines provide detailed information on testing and on issues such as the
cost of sampling and compliance testing when preparing a procurement budget (see Annex 4).
They stress that cost-saving efforts should only be introduced after fully proving the reliability of
the supplier through an extended period of full lot-by- lot testing. One of the advantages of
procurement through UNFPA, or other procurement agents such as PSI or Crown Agents, is that
they have already established testing procedures with suppliers.


5. Bidding Documents

The World Banks Standard Bidding Documents for Health Sector Goods, along with the
Technical Note for the Procurement of Health Sector Goods, are available on the Banks
website: http://www.worldbank.org/html/opr/procure/healthdocs.html. With the exception of
procurement from UN Agencies acting as suppliers pursuant to their own procedures, these
bidding documents must be used by Borrowers and their implementing agencies in the
procurement of Bank- financed condoms. There are separate sections for condom procurement as
indicated in its Table of Contents shown in the Annex 1, including sample technical
specifications.

One important dimension of selecting condom suppliers, whether directly or through an agent, is
pre-qualification. As the WHO/UNAIDS guidelines remind us, pre-qualification minimizes the
risk of purchasing a poor quality product by screening the capability of potential suppliers, so
that only those suppliers who can demonstrate that they have the capacity to produce a quality
product in a timely fashion will be eligible for a contract, irrespective of the price tendered.
UNFPA pre-qualifies its suppliers on a periodic basis following the WHO/UNAIDS guidelines
(see Annex 4 for documentation).

The Banks TN also recommends pre-qualification in paragraph 3.6.4: The Bank supports pre-
qualification for the procurement of health sector goods, including pharmaceuticals, vaccines,
and condoms. Pre-qualification contributes significantly to the purchase of high-quality products
while maintaining the desired competitive nature of the procurement process. Should the
procurement capacity of the implementing agency be inadequate to satisfactorily undertake the
pre-qualification of suppliers, the Borrower may contract for the assistance of outside consultants
or international agencies such as UNICEF to carry out the pre-qualification while it develops its
own capacity. Such assistance, which could be financed by a grant, must also include measures
to strengthen the Borrowers capacity to undertake pre-qualification for future projects.

The Bank and UNFPA are working on an agreement to harmonize UNFPAs and the Banks pre-
qualification procedures and documentation so that the results of a pre-qualification conducted
by UNFPA using these procedures and documentation would be useful/applicable to Bank-
financed contracts.
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6. Procurement Capacity I ssues

As already noted, the Banks procurement guidelines recognize that many Borrowers may lack
the necessary organization, resources and experience for procurement directly from suppliers and
may wish to employ a procurement agent. It is important that the decision to employ an agent be
based on an adequate assessment of procurement capacity, and if possible, that the terms of
reference of the procurement agent include technical support to assist the Borrower in
developing capacity for future procurements. This assessment may be based on a World Bank
Country Procurement Assessment Review or on a more focused look at issues specific to condom
procurement. The Banks TN for the procurement of health goods provides guidance on
assessing capacity in section 3.2:

The capacity of the party(ies) designated to carry out procurement must be examined for each
project so that appropriate support and technical assistance can be programmed into the project.
The Bank has issued instructions regarding Assessment of Agency Capacity to Implement Project
Procurement to guide evaluation of the capacity of the implementing agency and of the adequacy
of procurement and related systems in place to administer procurement in general, and Bank-
financed procurement in particular. The capacity assessment reviews the following areas: legal
aspects, procurement cycle management, organization and functions, support and control
systems, record keeping, staffing, the general procurement environment, and private sector
assessment. Such an assessment can identify weaknesses in the systems and procedures for
procurement, which may be able to be addressed through institutional capacity-building activities
financed by the project.

The evaluation also includes an assessment of administrative, political, and financial risks to the
procurement process. This produces a risk grading for the procurement- implementing agency,
identifies areas where action can be taken before and during project implementation to improve
long-term capacity of the institution, and sets the intensity and nature of Bank supervision of the
procurement. The intention is that prior review thresholds for the procurement of health sector
goods would be determined from the risk assessment.

Copies of documentation on both Country Procurement Capacity Assessment Reviews and
Assessment of Agency Capacity to Implement Bank Project Procurement can be found on the
Banks internal website. From the Banks internal homepage, go to Operations >Procurement
>Capacity Building.

Procurement capacity issues should be discussed in the Project Appraisal Document. An
example is found in the section in the Kenya project in the PAD for the Multi-country HIV/AIDS
Program for the Africa Region (see Annex 2 for link to document).

Two specific capacity areas where Borrowers may need assistance are forecasting of condom
requirements and logistics management. As noted earlier, technical support and guidance on
these issues is available from UNFPA and WHO as well as such private agencies as JSI.
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7. Linking to Other Components

Condom procurement will be just one part of the Borrowers overall strategic approach to
prevention of HIV/AIDS, sexually transmitted infections, and unwanted pregnancy. Condom
promotion, health education and community mobilization are needed to bring about the behavior
changes required for achievement of these goals. Borrowers may want to link procurement to
other elements of their prevention strategy, for example social marketing and community
mobilization.

The Haiti example mentioned earlier in this guide is an example of combining condom
procurement with social marketing. Even in cases where there is not a formal link between
procurement of condoms and social marketing or other condom promotion programs, these
efforts have to be closely coordinated for example, to ensure that the packaging, delivery
schedules and distribution of products dove-tail with promotion and marketing strategies.
Consumer motivation can fade in the face of very well designed promotional efforts if the
product is not available when consumers want to get it. The WHO/UNAIDS condom guidelines
include a useful annex on condom promotion (Annex 4) The largest condom social marketing
organizations are Population Services International (PSI, on the web at http://www.psi.org/),
DKT International (see Annex 5), and the USAID Commercial Marketing Strategies Project
(CMS), one of whose partners, The Futures Group International provides analytical services on
private markets (TFGI, at http://www.tfgi.com/cmsproj.asp)

Borrowers may also wish to bundle condom procurement with procurement of other HIV/AIDS
or reproductive health commodities (testing materials, drugs for treatment of STIs, etc.). While
UNFPA has strong capability for condom procurement, it is less strong for other RH and
HIV/AIDS commodities. UNICEF, on the other hand, does supply these commodities but not
condoms and contraceptives. UNFPA has reported that they, WHO and UNICEF have been
discussing this issue and recommend that countries interested in procuring through a UN agency
contract with UNFPA or UNICEF with the understanding that the agency which is contracted
will work with the other for items that agency does not itself supply.

A final concern about public-sector procurement of condoms is the risk of crowding private-
sector suppliers out of the market through under-pricing. Careful analysis of market conditions
to identify market segments for which subsidized distribution is warranted will help to alleviate
this problem. Social- marketing agencies and UNFPA are aware of this issue and can provide
technical assistance for market analyses.
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Annex 1: Bank Procurement Documents


Standard Bidding Document for the Procurement of Health Sector Goods (Pharmaceuticals,
Vaccines and Condoms) and its companion Technical Note are available on the external
website: http://www.worldbank.org/html/opr/procure/healthdocs.html

Procurement under I BRD Loans and I DA Credits (the red cover guide) is available on the
external website: http://www.worldbank.org/html/opr/procure/guidelin.html

Selection and Employment of Consultants by World Bank Borrowers (the green cover guide)
is available on the external website: http://www.worldbank.org/html/opr/consult/contents.html

Country Procurement Capacity Assessment Reviewsand Assessment of Agency Capacity to
I mplement Bank Project Procurement can be found on the Banks internal website. Here is the
path from the Banks internal homepage, go to Operations>Procurement>Capacity Building.
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Annex 2: Procurement Documentation from Bank Projects
The web version of the guide includes the full set of the following Procurement Documentation.


Brazil AI DS & STD Control I I
ICB Tender for Condoms (English, 27 pages)

Kenya Fourth Population Project and Sexually Transmitted I nfections (STI ) Project
Condom Procurement Agency Tender (12 pages) and Agreement (55 pages)

Kenya's Third and Fourth Population ProjectsProject Implementation Completion Reports
(ICRs) are available from Imagebank (External users go to http://www-wds.worldbank.org/ )

Multi-country HI V/AI DS Program for the Africa Region (Ethiopia and Kenya) is available
from Imagebank (External users go to http://www-wds.worldbank.org/ )

Haiti First Health Project
Contract with PSI (French, 13 pages)
Terms of Reference (French, 3 pages)



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Annex 3: UNFPA Standard Agreement for Governments Utilizing UNFPA
Procurement Facilities (used in various Bank Population Projects in Haiti, Burkina Faso,
Niger, Ghana, and Cote d'Ivoire ) (English, 8 pages)


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AGREEMENT BETWEEN THE UNITED NATIONS POPULATION FUND
(UNFPA) AND GOVERNMENT OF ______, MINISTRY OF HEALTH ON
THE UTILIZATION OF UNFPA PROCUREMENT FACILITIES


WHEREAS, the United Nations Population Fund (the "UNFPA") was established
to provide assistance to Governments in the field of population and;

WHEREAS, pursuant to its Financial Regulations UNFPA may provide supplies,
equipment and services under reimbursable procurement arrangements at the request
and on behalf of Governments, where such supplies, equipment and services are
required for purposes related to UNFPA activities and are consistent with the aims and
policies of UNFPA, on the basis of full payment, in advance of the procurement
activities, to cover all costs, including insurance, connected with the procurement of
such supplies, equipment and services; and

WHEREAS, UNFPA undertakes to assist MINISTRY OF HEALTH (the
"Government") in the procurement of goods and supplies (the "Services"), consistent
with the aims and policies of UNFPA, and in accordance with the Financial Regulations
and Rules of UNFPA and the terms and conditions of this Agreement; and

WHEREAS, the Government desires to avail itself of the Services in accordance
with the terms and conditions of this Agreement;

NOW THEREFORE, it is agreed as follows:


Section 1: Requests for Purchase of Goods

1.1 The Government shall submit to UNFPA formal written requests, detailing any
requirements it wishes UNFPA to procure (the "Requests"). Requests may be
transmitted to UNFPA by facsimile, provided the Request clearly shows the signature,
full name and title of a duly authorized official of the Government, and provided that an
original signed Request is delivered or mailed to UNFPA prior to or immediately after
the facsimile transmission.

1.2 The Request shall provide the following information:

(a) Information indicating the name and type of project for which the goods
are intended;
(b) Full details of the goods required, formulation, strength, unit of packaging,
standards or specifications applicable;
(c) Quantity required of each item requested clearly specifying unit of
purchase.

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1.3 UNFPA expressly reserves the right, in its sole discretion, to accept or reject any
such Request. The acceptance of any Request shall be subject to this Agreement.

1.4 Upon acceptance of the Request by UNFPA, a proforma invoice will be sent to the
Government, covering the goods to be ordered and giving the total cost of the goods,
pre-shipment inspection costs, and where applicable, insurance and freight costs, plus
an amount sufficient to defray the administrative costs incurred by UNFPA in the
provision of Services under this Agreement. Such costs are presently estimated to
equal five per cent (5%) of the CIF value of the goods. The proforma invoice shall also
specify an increment to be included in the Advance Payment to be made by the
Government pursuant to Section 2 hereof to cover possible increases or other
contingencies. Prices quoted in the proforma invoice will be subject to change without
notice. Prices actually debited against the Advance Payment made by the Government
may be higher or lower, and shall be based upon prices invoiced to UNFPA by the
suppliers of the goods and of the actual costs of inspection, shipment services and
insurance. The proforma invoice shall constitute notice to the Government that its
Request has been accepted by UNFPA.

1.5 The Government shall be responsible for ensuring that the description of the goods
and procurement units in the proforma invoice are in agreement with the Request.

1.6 Amendments to a Request, or cancellation or reduction of quantities already
accepted by UNFPA, may be affected only with the prior written agreement of UNFPA.
Any reduction or cancellation so agreed to will result in return to the Government of that
portion of its Advance Payment representing the sums referred to in Section 1.4 above,
in respect of the reduced or canceled quantities, less any costs, charges, expenses,
and penalties arising from or relating to the reduction or cancellation. Any additions or
increases to the Requests shall require additional Advance Payments. The
Government shall be responsible for payment of any costs or penalties arising from a
cancellation or reduction or increase of quantities.


Section 2: Advance Payment for the Services

2.1 Pursuant to UNFPA policy to ensure availability and receipt of funds prior to
committing to any expenditure or processing any Requests, the Government shall pay,
or make arrangements for payment to UNFPA, an Advance Payment for the provision of
the Services. Depending on the source of funds, the following procedure will be
followed for making the Advance Payment:

(a) In the event that the funds for the Services derive from the Government itself, the
Government shall deposit with the UNFPA, within ___ days after the date of the
proforma invoice, in U.S. dollars, or other convertible currency acceptable to the
UNFPA, the amounts specified in the proforma invoice and in the currencies
specified therein; said Advance Payment shall be deposited in the bank account
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specified in the proforma invoice. In the event that the actual costs of the
Services exceed the deposited amount, the provisions of Section 2.3 below shall
apply;

(b) In cases where the funds for the Services derive from funds provided to the
Government by Multilateral Financing Institution (the "Institution"), the
Government shall execute an irrevocable Blanket Withdrawal Request, with copy
to UNFPA, covering the entire cost of the Services, pursuant to which the
Institution will remit funds for the Services directly to UNFPA. Such Blanket
Withdrawal Request shall be annexed to this Agreement and shall constitute an
integral part thereof. Upon receipt by UNFPA of notice from the Institution that
the Blanket Withdrawal Request from the Government has been approved,
UNFPA shall submit a request to the Institution, with a copy to the Government,
to make a direct payment in US dollars to the UNFPA's Account Number
015004570 at Chemical Bank, UN Branch, 1 UN Plaza, New York, NY 10017, in
an amount equal to the amount specified in the proforma invoice. In the event
that the actual costs of the Services exceed the estimated amount, the provisions
of Section 2.3 below shall apply mutatis mutandis;

(c) In the event that the funds for the Services derive from grants by donor
Governments, the Services by UNFPA shall be provided only after conclusion of
an agreement between UNFPA and the donor Government, covering, inter alia,
the financial arrangements between the Parties.

2.2 No Request shall be acted upon by the UNFPA until the Advance Payment has
been deposited with UNFPA.

2.3 Upon notification by UNFPA, the Government shall pay to UNFPA, or make
arrangements for the deposit of any additional funds if, for any reason, including
currency rate changes or price changes in respect of the goods or incidental charges,
the Advance Payments originally made pursuant to Section 2.1 above are no longer
sufficient to cover the cost of the goods and all other incidental charges. The
processing of a Request shall not be continued or pursued by UNFPA until the
additional funds are deposited.


Section 3: Procurement and Shipment

3.1 Within a reasonable period of time after accepting a Request and after the Advance
Payment or any additional funds have been deposited by the Government, UNFPA shall
procure the goods on behalf of the government for shipment directly from the supplier to
the Government. UNFPA's procurement of goods on behalf of the Government will be
made in accordance with UNFPA's Financial Regulations and Rules.

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3.2 All goods will be procured on the basis of CIF terms (for carriage by sea and inland
waterway) or CIP terms (for any other mode of shipment) (INTCOTERMS 1990).

3.3 UNFPA shall make provision for inspection of purchases prior to shipment and the
cost of such inspection shall be debited to the Government's Advance Payment, or
otherwise charged to the Government, as part of the cost of the services provided under
this Agreement.
3.4 Upon shipment of the purchases, UNFPA will forward to the Government copies of
the relevant shipping documents.

3.5 If any import or export licenses are required for the goods and are not obtained by
the supplier, the Government shall obtain licenses.

3.6 The Government shall be responsible for and shall bear and pay all costs
associated with the carriage and insurance of the goods. The Government shall also be
responsible for, and shall bear and pay all costs associated with the clearance, receipt,
inspection upon delivery, loading, unloading, storage, insurance, transport and
distribution of the goods, except with respect to such services or costs as are arranged
or borne, as the case may be, by the supplier of the goods.

3.7 UNFPA shall not be nominated the consignee of the goods without explicit written
agreement from UNFPA. Special customs, product registration and consular
requirements in the recipient country shall be deemed unknown by UNFPA unless
clearly stated in the Request; however, the fulfillment of such requirements shall be the
exclusive responsibility of the Government.

3.8 UNFPA cannot accept any return of supplies shipped for the account of the
Government.


Section 4: UNFPA's Liability

4.1 UNFPA's sole responsibility to the Government in respect of the Services shall be
limited to the execution with reasonable diligence and efficiency of a Request accepted
by the UNFPA as herein provided. UNFPA shall have no legal liability either to the
Government or to any third party arising out of or in connection with the performance of
the Services and shall not be responsible for, inter alia, loss or damage to the goods or
for delays or failures in shipment or delivery of the goods, except if due to UNFPA's
failure to execute the Request with reasonable diligence and efficiency.

4.2 In no event shall any liability of UNFPA to the Government or to any third person,
whether such liability arises under this Agreement or otherwise, exceed the purchase
price of goods in respect of which the liability arises. Moreover, UNFPA shall under no
circumstances be liable for any indirect or consequential damages arising from the
performance of the Services under this Agreement.
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Section 5: Claims

5.1 The Government recognizes that, in the performance of the Services under this
Agreement, UNFPA will be acting on behalf of the Government, and not as agent of the
supplier of the goods or any other persons or entities. Consequently, all claims relating
to any defects in quality or quantity shall be handled directly by and between the
Government and the manufacturer(s), supplier(s), seller(s), shipper(s), or insurer(s).
5.2 The Government shall indemnify, defend and hold and save harmless, at the
Government's own expense, UNFPA, its agents, servants and employees, from and
against all and any demands, claims, suits or other causes of action and liability of any
nature or kind, including costs and expenses, caused by, arising out of or in connection
with the goods or the use thereof (including, but not limited to, demands, claims, suits,
causes of action or liability based on products liability) or the performance by UNFPA of
the Services under this Agreement.


Section 6: Warranty

UNFPA shall pass on to the Government all warranties offered by the
manufacturer(s) or supplier(s) of the goods, and shall ensure that all contracts with the
manufacturer(s), supplier(s), seller(s), shipper(s) or insurer(s) include provision covering
product liability claims. UNFPA offers no warranty, expressed or implied, of any nature
whatever, including warranties that the goods are merchantable or fit for any particular
purpose.


Section 7: Conditions of the Agreement

7.1 The obligations of UNFPA under this Agreement shall be conditional upon:

(a) the deposit of the Advance Payments and additional funds in accordance with
Section 2.1 (a) or (b) of this Agreement, in the event that the Services are funded
by the Government or by an Institution;

(b) the conclusion of an Agreement between UNFPA and the donor Government in
accordance with Section 2.1 8 of this Agreement in cases where the funds for the
Services are provided by a donor Government.

7.2 Nothing in this Agreement shall require, or be construed to require UNFPA to take
any action in violation of the mandate of UNFPA or to contravene any of the UNFPA
policies, regulations, rules and procedures.




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Section 8: Representatives and Warranties of Parties

8.1 Each Party represents and warrants to the other that:

(a) such Party has full power and authority to enter into this Agreement and to
consummate the transaction contemplated hereby;

(b) all consents, approval, authorizations and other requirements prescribed by any
law, rule or regulation that must be obtained or satisfied by a Party as are
necessary for such Party's execution and implementation of this Agreement or
the performance of the terms hereof have been obtained and satisfied.


Section 9: Reports and Final Account

9.1 UNFPA shall provide to the Government reports and financial statements
concerning the expenditures incurred for the provision of Services under this
Agreement, in accordance with UNFPA's rules and procedures.

9.2 After shipment of all purchases, UNFPA shall prepare a final statement of account
expressed in U.S. dollars, to be forwarded to the Government, covering the total cost of
the Services.

9.3 In the event that the final statement of account indicates a balance of funds in favor
of the Government, these funds shall, unless otherwise requested by the Government,
be returned to the Government.

9.4 The United Nations operational rate of exchange shall apply to all currency
conversions under this Agreement.


Section 10: Settlement of Disputes

Any dispute, controversy or claim arising out of or relating to this Agreement, or
the breach, termination or invalidity thereof, shall, unless it is settled by direct
negotiations, be settled by arbitration in accordance with the UNCITRAL Arbitration
Rules as at present in force. UNFPA and the Government agree to be bound by any
arbitration award rendered as a result of such arbitration, as the final adjudication of
such dispute, controversy or claim.






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Section 11: Privileges and Immunities

Nothing contained in or relating to this Agreement shall be deemed a waiver,
expressed or implied, or any of the privileges and immunities of the United Nations,
including UNFPA.


Section 12: Amendment, Suspension and Termination

12.1 This Agreement may be altered, modified or amended only by a written instrument
duly executed by both Parties hereto.


12.2 This Agreement may be suspended by written notice from the suspending Party if:
(a) the other Party has failed in any material respect to perform its obligations hereunder
and such failure shall continue for a period of thirty (30) days after the party seeking to
suspend has given the other Party notice of such failure, or (b) an event beyond the
reasonable control of such Party occurs which makes it impossible for that Party to
carry its obligations under this Agreement.

12.3 If this Amendment is suspended, neither Party shall be obligated to undertake
additional responsibilities hereunder during the period of suspension (which period may
continue for as long as the breach remains unremedied); provided, however, that the
Parties shall comply with their obligations and responsibilities already incurred or
commenced prior to such suspension. A Party suspending this Agreement shall retain
the right to terminate this Agreement by providing notice of such termination to the other
Party.

12.4 This Agreement may be terminated without prejudice to the rights of either Party
by written notice of either Party, effective sixty (60) days after the date of such notice.
Upon termination of this Agreement, the Parties shall take all reasonable and necessary
measures to conclude the Services already commenced under this Agreement.

12.5 Suspension or termination of this Agreement for any reason shall not release
either Party from any obligations that have already been undertaken at such time and
shall not affect the survival of any right, duty or obligation of either Party. In particular,
suspension or termination of this Agreement shall not relieve either Party of its
obligation to pay all monies due to the other Party for services performed and
obligations incurred prior to the effective date of such suspension or termination.

12.6 Upon cancellation of this Agreement, the Parties shall take all reasonable and
necessary measures to conclude the services already commenced to permit orderly
settlement of accounts between the Parties.


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Section 13: Entry in Force

This Agreement shall enter into force on the date when it has been signed by
both Parties. However, if by that date the Government has not deposited, or made
arrangements for the deposit of the funds covering the costs for the provision of the
Services by UNFPA, this Agreement shall enter force on the date when these
requirements have been satisfied.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
____________ at ____________.

For UNFPA For the Government


___________________ ______________________
Signature Signature


____________________ _____________________
Name Name


_____________________ ______________________
Title Title


_____________________ ____________________
Date Date

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Annex 4: WHO/UNAIDS Guide on Technical Specifications for Condoms


1. The Male Latex Condom. Geneva: WHO/UNAIDS, 1998. (WHO/RHT/FPP98.15,
UNAIDS/98.12.) includes the following materials:

Specification and Guidelines for Condom Procurement

This document focuses primarily on procurement issues related to condom quality since these
procedures differ significantly from those used to procure other health care products.

The first section provides a step-by-step guide to the procurement process and describes the
different quality assurance measures that are applied to ensure the procurement and distribution
of high-quality condoms.

The second section details the essential safety, efficacy and design components of a good
specification for condoms suitable for use in developing countries and tropical environments and
describes the tests required to verify compliance with the specification. This specification should
be studied by programme managers and adapted to their specific design requirements.

The appendix includes material on testing considerations as well as additional resources.

http://www.unaids.org/publications/documents/care/mcondoms/JC003-MaleCondom-
Guidelines.pdf


10 Condom Programming Fact Sheets

These fact sheets are designed to review the latest scientific evidence, basic concepts and best
practices in key areas of condom programming. They are a source of the basic information
required to support the successful and effective procurement, promotion and distribution of high-
quality condoms through national reproductive health care programmes, family planning,
STD/HIV prevention programmes and condom social marketing programmes.

Fact Sheet Introduction
Fact Sheet 1. Scientific Facts on the Natural Rubber Latex Condom reviews the clinical evidence
regarding the efficacy of the latex condom.
Fact Sheet 2. Condom Programming reviews the key activities required to create demand and
link it to the supply of condoms.
Fact Sheet 3. Quality Assurance reviews the different quality assurance measures applied to the
procurement and distribution of condoms.
Fact Sheet 4. Condom Promotion reviews where, when and how the various techniques to
promote condoms can be used effectively.
Fact Sheet 5. Logistics Management reviews each of the key activities involved in developing
and maintaining an effective logistics cycle.
Fact Sheet 6. Research guides the manager through the process of defining research needs.
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Fact Sheet 7. Improving Staff Performance reviews different techniques that can be incorporated
into a work plan to assess and improve staff performance.
Fact Sheet 8. Social Marketing of Condoms reviews the activities involved in developing and
implementing social marketing programmes.
Fact Sheet 9. Male and Female Synthetic Condoms reviews the latest information on the
development of synthetic condoms.
Fact Sheet 10. Bibliography and Further Resources complements the bibliography in the
monograph.
Condom Manufacturers

http://www.unaids.org/publications/documents/care/mcondoms/JC003-MaleCondom-
FactSheets.pdf

Monograph: The Latex Condom - Recent Advances, Future Directions

The latex condom is the only contraceptive method proven to reduce the risk of all STDs,
including HIV. This monograph provides a comprehensive review of recent advances in latex
condom research regarding effectiveness, manufacturing, quality assurance, performance in
human use, acceptability and user behaviors. Written and edited by researchers, product
compliance specialists and policy experts at Family Health International (FHI), it also
summarizes future directions for manufacturing and designing the latex product, research
priorities on acceptability and behavioral issues, and advances in non- latex alternatives. Click
here to access the complete monograph: http://www.fhi.org/en/fp/fpother/conom/index.html

A copy of the Male Latex Condombinder is also available for loan from the Sectoral and IT
Resource Center.


2. The Male Condom Technical Update, UNAIDS Best Practice Collection, 2000. A technical
summary of the issues, challenges and solutions regarding male condoms and HIV/AIDS, in
English, French, Spanish, Russian.
http://www.unaids.org/publications/documents/care/mcondoms/JC302-TU18-MaleCondom-
E.pdf


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Annex 5: Additional Resources


Forecasting, Logistics

Centers for Disease Control (CDC). Contraceptive Logistics Publications - available from the
website: http://www.cdc.gov

John Snow Inc. (JSI). Contraceptive Forecasting Handbook - available from the http://jsi.com
or from USAIDs Development Experience Clearinghouse website: http://www.dec.org

UNFPA. The Role of the Logistics Manager in Contraceptive Procurement - available from
UNFPAs website under the Global Initiative for Reproductive Health Commodity Security:
http://www.unfpa.org

World Bank. Costs of Scaling HIV Program Activities to a National Level in Sub-Saharan
Africa: Methods and Estimates available from the World Banks external website. From the
Banks homepage, http://www.worldbank.org , go to Development Topics>AIDS>Publications.

Management Sciences for Health (MSH) provides expertise on drug management practices
including procurement in the public sector, improving information management and inventory
control, expanding drug information resources, and promoting rational drug use:
http://www.msh.org

Program for Appropriate Technology in Health (PATH) provides a range of technical advice
on safe, appropriate, and cost-effective supplies and equipment for health programs:
http://www.path.org


Social Marketing

UNAIDS publications website contains several useful resources on Social Marketing:

Social Marketing: An effective tool in the global response to HI V/AI DS. UNAIDS Best
Practice Collection, 1998. (UNAIDS/98.26). Explanation of the social marketing approach and
how it has been applied to condoms. It justifies the use of social marketing, provides extensive
data on sales of condoms and outlines some challenges. In French, Spanish and English versions.
http://www.unaids.org/publications/documents/supporting/communications/una98e26.txt and pdf

Social Marketing: Expanding access to essential products and services to prevent HI V/AI DS
and to limit the impact of the epidemic, UNAIDS /PSI, 1999. Three case studies on condom
social marketing in different developing countries, briefly described, includes female condoms,
highlighting lessons learned. In French, Spanish and English versions.
http://www.unaids.org/publications/documents/supporting/communications/Social_Marketing_E.
pdf

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Global Directory of Condom Social Marketing Projects and Organizations, UNAIDS, 2001. A
comprehensive catalogue of over 70 condom social marketing projects and programmes in more
than 50 countries, with a summary description of each. Hardcopy only.

Condom Social Marketing: Selected case Studies, UNAIDS, Best Practice Collection, 2000.
(UNAIDS/00.37E) A collection of six case studies drawn from programmes around the world
illustrating different ways to distribute condoms through social marketing.
http://www.unaids.org/publications/documents/supporting/communications/JC-CondSocMark-
E.pdf and htm

Population Services International (PSI) website provides a listing of current program activities:
http://www.psi.org

DKT International is another social marketing agency. Their address is: 1120 19th Street, NW,
Suite 610, Washington, DC 20036, Tel. 202-785-0094. (No website available).


Procurement Agents

Crown Agents: http://crownagents.com

FEDPRO- Federation of Procurement Specialist Organizations: http://www.fedpro.org

GTZ: http://www.gtz.de./english/index.asp

UNFPA: http://unfpa.org